Abstract
Since the term disease management was introduced is linked to the hope of improving healthcare quality and reducing its cost, which is becoming one of the nation’s main concerns. Many organizations for the provision of managed care depend on disease management tools (programs and protocols). Evidence shows that despite marginal success in improving the quality of care, reducing costs is still far from achieved. This essay aims at clarifying what are disease management, managed care, and the impact of disease management on managed care.
Introduction
The US health care system is reputable for its high costs, which most Americans consider the price of excellence. In the past two decades, health care costs have enormously increased to become one of America’s alarming concerns. Health care costs are nearly $2 trillion US yearly and are rising to become nearly a national crisis. The blend of high costs, unsatisfactory quality, and limited access is growing anxiety to all health care stakeholders. Trials to improve the balance between quality and costs mostly failed if not bringing the issue worse. The main reason behind the failure of these trials is they, usually, targeted one or two sides of the health care system, instead, disease management in managed health care systems should largely reduce the problem (Porter and Teisberg 2006).
Disease management is a practical systematic approach for coordinating health care interventions and communications that suggest potential effectiveness in reducing healthcare costs while keeping a high service quality (Singh 2008).
Research problem and aim of the work
Evidence that disease management programs improve health outcomes is mostly subjective, and qualitative rather than quantitative. Further, disease management does not include all conditions where it might be successful. Therefore, this thesis will briefly review the philosophy and tools of disease management. Since the basic meaning of managed care is reducing the cost of healthcare; yet at the same time, improving the quality of care, both disease management and managed care should be reciprocally-related. The thesis will clarify what are disease management, managed care, and the impact of disease management on managed care.
Disease management
Disease management programs target patients with chronic illnesses or high-cost conditions who will take advantage of effectual self-management and evidence-based interventions. These programs aim at improving health status and lowering rates of hospitalization. Despite the promise, the evidence that disease management programs can produce a positive return on investment is partial. To achieve successful disease management (DM) programs, there are obstacles to overcome; programs should overcome physician resistance, and poor patient compliance to treatment, and poor communication systems (Mechanic 2002).
Definition
According to the definition provided by the Disease Management Association of America, disease management (DM) is a multidisciplinary, synchronized wide-range array algorithm aiming to deliver healthcare and communications. It targets populations at risk or with verified medical conditions (Goetzel et al 2005). It is a process of reducing health care costs without giving in to the individuals’ quality of life. This can be achieved by reducing the effects of chronic diseases through coordinated reciprocative care (Congressional Budget Office 2004).
Ingredients
Disease management programs differ in the specific techniques and tools they use; however, they all show common components. First, to identify the target population that is populations at risk for or with chronic medical conditions. Second, to educate patients about their diseases aiming for proper use of medications, reduce noncompliance, self-care (understand and monitor symptoms), and, whenever possible, to influence lifestyle or a desirable behavior change. The third is to follow evidence-based guidelines for patients’ management, and the fourth, to induce collaborative care practice that is to coordinate care among all health care providers.
Fifth, to include routine reporting to provide feedback on patients, promote coordination among different disciplines, and keep patients’ up-to-date information. Finally, process and outcome measurement, including cost-effectiveness is an essential part of any DM program, although the quality of life is difficult to measure as an outcome as it combines physical, emotional, and psychological well-being (Krumholz et al 2006).
How does it work?
The disease management approach is one algorithm of care management (the other is case management). It focuses on patients already diagnosed with specific chronic conditions like diabetes, congestive heart failure, or bronchial asthma, while case management focuses on high-risk patients with combined medical conditions, commonly prone to acute exacerbations mandating hospitalization (Geyman 2007).
Therefore, a major difference among DM programs is the approach of identifying and serving their beneficiaries. The first is to include a health plan entire population aiming to find out undiagnosed or not accurately diagnosed patients. This has the advantage of reducing the possibility of missing a beneficiary; however, it incurs extra costs serving those whose conditions are stable or well managed without intervention. The second approach is to use predictive models to identify the most likely beneficiaries; however, this closely relates to the model accuracy. A third approach is to wait for a first acute episode (e.g. hospitalization rates) to start intervention. This is the narrowest idea as to when an acute episode occurs the disease may have progressed to cause large intervention costs (Congressional Budget Office 2004).
Effectiveness
Early disease management programs did not prove successful as hoped because of clinical issues, lack of funds, and administrative difficulties (Baldwin 1999). One of the difficulties in evaluating effectiveness is that most studies followed the observational study design, which can only control observed variables, not hidden ones. Thus, probably incorrect conclusions about the effectiveness of DM programs were drawn from such studies (Linden et al 2006).
Geyman (2007) reviewed the literature evaluating DM programs and inferred that evidence for quality improvement is stronger than for cost cuts. Further, the author noticed there are few, if any, studies comparing DM programs integrated into primary care with outcomes of those integrated in private practice. Geyman (2007) reviewed three Meta-analysis studies and inferred that chronic case modeling produced beneficial cost results but the mixed quality of life results. In addition, when DM programs are provided to the severely ill, beneficiaries, however further studies on beneficiaries with co-morbidities are still necessary. A third Meta-analysis confirmed significant quality of care improvement at satisfactory costs.
Challenges
Disease management is not yet a perfect solution to health care problems; there are some challenges to face before it becomes a universal cure to health care quality versus cost balance. The challenges include the potential of fragmentation of patient care, lack of standards of DM programs standards of practice, despite the wide variety of programs; yet, DM programs do not encompass all conditions where they might be successful. Challenges also include the need for quantitative evidence to assess the outcomes, the possible costs to integrate online information advice services into both the provider and managed care organization (Nash and Todd 2001).
Managed care
Managed care is a wide-range group of health insurance coverage. Managed care organizations have contractual arrangements with individual doctors, hospitals, and other health care providers to give an array of services to plan members at a reduced cost. Thus, managed Care is operating management principles, like the partial integration of service financing and selective contracting with service providers to health care. The aim is the efficient control of expenditure and excellence in the health care system (Barr 2007).
Definition
Managed Care is the framework of care systems separating cost units from service providers. Managed Care is the abstract for controlled care, where the cost unit, like the sickness fund, controls the business management of medical care (Greiner et al 2001).
Structural outline
A managed care organization is an association, corporation (entity) allowed by law to enter into a contract for a predetermined fee to provide or arrange, in return, one or more types of healthcare services through a prearranged provider network. For such a contract, the healthcare services can be either limited to a certain condition (s) or inclusive. For an entity, the provider network can be either limited to physicians or comprehensive.
The contract may provide either an upside risk that is the level at which insurance may increase beyond predicted levels, or a downside risk that is the level at which the value of insurance may wane or determine the amount of loss that can result from that wane possibility. Thus, managed care organizations may hold licenses as health insurers, hold corporate business licenses when they can work as administrators of managed care plans and subcontractors to insurers, or they can hold licenses as insurers and subcontractors (Rosenbaum 2003).
Organizations types
Wagner and Kongstvedt (2007) described five types of managed care organizations:
- Health maintenance organizations (HMO): These are the earliest appearance of managed care created by the Health Maintenance Organization act passed in 1973. The term refers to the organization where doctors, hospitals, and insurance plans are joined in the same organization as HMO owns the hospitals and pays doctors on a salary basis. Patients in an HMO-managed care plan can visit only the plan-associated healthcare provider except in emergency cases, and can only see specialists on referral from a primary care physician. Besides, beneficiaries have a fixed amount of funds to consume for medical care. HMO focuses on prevention and limits medical procedures to cut expenses short.
- Preferred provider organizations (PPO): Like HMO, these organizations have a network of health providers, however, unlike HMO, a beneficiary can choose from providers inside or outside the network. In addition, unlike HMO, no specialist referrals are needed if a beneficiary chooses from inside the plan. Thus, PPO offers greater flexibility but costs the beneficiary more.
- Point of service organizations (POS): Like HMO, there is a fixed fee arrangement with providers for the beneficiaries, however, unlike HMO; doctors do not have to work in specified hospitals. Unlike HMO, doctors’ compensation is per patient per year. Experts consider these organizations the crossbreed of HMO and PPO. An advantage, especially for travelers, is beneficiaries can access network health care providers, hence the name point of service.
- Fee for service organizations: This is the other end to HMO, where patients are free to visit a provider of their choice. The provider is paid per patient per visit, or procedure.
- Independent Practice Association: Where providers work independently and receive patients from either HMO or fee-for-service organizations.
Disparities in managed care
Early studies reporting on measures of quality of care by managed care organizations showed African-Americans received lower-quality care than whites. However, in their seven-year study, Trivedi et al (2005) showed narrowing of the gap and improvement of all measurements for the black and white beneficiaries.
Challenges
Morrow and Shurney (2006) suggested the most evident challenges facing managed care plans are the lack of proof on return on investment (ROI) and the lack of standardized methods of ROI calculation. In addition, they pointed to the lack of beneficiary-orient wellness programs as a means to reduce health costs, lack of organizational awareness of the population at risk, and lack of beneficiaries’ active participation in decision making. Finally, they pointed to the organizational system that overwhelms primary care providers with chronic diseases.
Impact of disease management on managed care
Since the main objectives of disease management are to improve patients’ health outcomes at a reduced cost, which include proper utilization of resources, discussing the impact of DM on managed care will follow the formula impact (value) = outcome/cost (Porter and Teisberg 2006).
Impact on patient care
Reports show that HMO, PPO, and PPS disease management programs resulted in positive quality care outcomes and reduced costs. This is not the case for fee-for-service managed care organizations possibly because of the fragmented (hit-or-miss) mode of service. However, in all cases, high-level managed care for chronically ill patients has not yet been achieved (ACP 2004).
The problem is clearer in chronically ill patients with comorbidities (suffering 2 or more chronic diseases simultaneously). This group of patients represents 26% of the population at risk with 50% expenditure of the overall health care costs, for better care and cost-effectiveness, improving self-care practices thus, minimizing costs through reducing the use of different health care services like hospital admissions and emergency room interventions (Charlson et al 2007).
Quality of care is the extent to which health services targeting individuals or populations at risk increase the odds of the longed-for health outcomes (WHO 2003). The WHO report (2003) pointed that health care delivery is not the only factor to improve quality of care, managed care organizations and disease management structural elements are essential for better quality care. The report, examining the effectiveness of disease management programs to achieve better quality care concluded that since managed care organizations work in a multidisciplinary environment, there should be multi-component programs with practical approaches focusing on the overall course of chronic disease.
The report also pointed to the heterogeneity of disease management programs, which results in difficulties in evaluation and transferability from one clinical setting to another. Finally, despite many reports of the effectiveness of disease management programs, yet, there is a lack of evidence on the effect of these programs on patients’ survival, quality of life, and nearly no evidence on their relative’s cost-effectiveness (WHO 2003).
Economic (fiscal) Impact
Charlson et al (2007) showed that costs for chronic diseases range between $1.1 billion and $1.5 billion, with congestive heart failure, stroke, diabetes, and can are the highest in cost. Fireman et al (2004) examined indicators of improved quality of service, utilization, and costs of the previous four conditions over seven years (1996-2002). Their results showed evidence of significant quality improvement but not cost-saving and inferred the underlying concept of improved care leads to reduced morbidity, and then cost reduction did not turn out enough dost effectiveness.
However, in response to the assumption that failure in cost-effectiveness can be because of rising market costs and not to the failure of disease management programs (DMPs), they found that without DMPS, costs would have increased by 28% not by 19% as it was the case. For better economic outcomes, Fireman et al (2004) suggested that as DMPs focus on quality improvement, utilization management, and productivity improvement should also be implemented in future DMPs.
Holmes et al (2008) suggested that short-term cost reduction is significant in DMPs targeting congestive heart failure patients than diabetic patients. Further, fiscal gains from DMPS targeting lower-risk populations are significant; therefore, they inferred DMPs should mainly focus on those patients to achieve overall cost reductions.
Impact on patients behavior
Blount et al (2007) believed improvement of the population health behavior should result in overall health improvement. Improving health behavior is likely to be the area with the greatest potential to reduce morbidity and increase cost-effectiveness. Evidence shows that behavioral health services if introduced through primary health care would produce the greatest impact (Blount et al 2007). Woolf et al (2005) suggested integrating health and community service towards maintaining healthy behaviors should improve the patient-centered approach of disease management. They inferred such integration can also be the path for fragmented health care systems to serve patients.
Conclusion
The above discussion shows that generalized DMPs following the principle of one size fits all did show a significant reduction in health care costs, despite improvement in the quality of care. Both cost and quality are likely to improve if systematic tailoring of DMPs to patients, which may result in more efficiency in targeting resources, increase patients’ competence to self-care, and improve their health behavior.
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